Iron ore is 15 per cent costlier in Karnataka from a year before, at a time when its price across the globe and in other states has been rising. A supply chain disruption at Brazil has led to a 30 per cent increase in the global price, from $69 a tonne in December to $90 a tonne at present. In Karnataka, mining companies blame poor buying by JSW Steel and a ban on shipment out of the state. JSW Steel denies this and says differential pricing and poor quality are the main reasons. Seshagiri Rao, group finance head at JSW, says Karnataka’s largest mining entity was charging Rs 3,335 a tonne when ore from Chhattisgarh was available at Rs 2,660 a tonne (without taxes).
After discussions, the differential was removed but reintroduced in December.
On February 22, he said, ore from Chhattisgarh was Rs 2,760 a tonne; the Karnataka price was Rs 3,020 a tonne. He said the latter price was Rs 3,335 a tonne on April 1, 2018, which showed Karnataka prices had not gone up. “This is what they are trying to mislead. Whereas, compared to the Chhattisgarh prices, they are charging a premium,” said Rao. While mining firms in the state claim nearly 14 million tonnes has piled up as inventory since JSW started importing iron ore, Rao says nearly 10 mt didn't come for any auction.